The Stargate Foundation advises the DAO not to reissue STG tokens

In agreement with FTX liquidators, the Stargate Foundation has advised the DAO that issuing the STG token may jeopardize its safety and may violate the automatic stay.

Due to concerns raised by FTX liquidators, the Stargate Foundation has advised its decentralized autonomous organization (DAO) against reissuing Stargate’s native Stargate Finance (STG) token. The liquidators believe that such a move would violate the automatic stay and could result in legal consequences.

Alameda Research, a former cryptocurrency trading firm, paid $25 million for the entire STG auction in March 2022. However, in November of the same year, FTX declared bankruptcy, and the wallets of FTX and Alameda were hacked for approximately $500 million. All assets were eventually transferred to new wallets by the liquidators.

In light of these developments, Stargate DAO has proposed reissuing the STG token in order to transfer funds from the potentially compromised wallet to a safer wallet. The FTX liquidators, however, have rejected this proposal.

The liquidators’ concerns, according to Stargate DAO, are unfounded, and reissuing the STG token would not violate the automatic stay. “Nothing in any interaction the foundation has had with the liquidators indicates that they have a firm grasp of the reality of the smart contracts, how the contracts work, or how they will interact with the contract to secure the funds,” Stargate tweeted.

Despite the efforts of exchanges, protocols, and third parties to ensure the security of funds, the foundation maintains its recommendation against reissuing the STG token due to FTX liquidators’ opinions.